Airfare Prices Rise: The Technology That Will Kill Low-Cost Airlines

Airlines are implementing AI-based pricing systems that analyze passenger data to determine the maximum price they are willing to pay, which could destroy the budget flight segment. Experts warn that this technology is anti-consumer. Meanwhile, Lufthansa is expanding its operations in Israel, and SWISS will resume flights to Ben-Gurion from August 1.

Airlines are rolling out AI-driven pricing systems that analyze millions of parameters about individual passengers to determine the maximum price they are willing to pay. Factors include device type, geolocation, loyalty program status, and real-time behavior. This technology, called 'Surveillance Pricing,' has raised concerns among experts, who warn that it is anti-consumer and could wipe out the budget flight segment. In theory, airlines could cross-reference data with external databases on income and consumer habits. Regulatory hurdles currently impede widespread adoption: in the US, the Federal Trade Commission has launched an investigation. Against this backdrop, the Lufthansa Group announced an expansion of its operations in Israel by August, and SWISS will resume flights to Ben-Gurion from August 1 after a pause since March due to Operation 'Roar of the Lion.'